#Customer#experience is the #focus for two #fintech accelerators, one run by #Commerzbank, the other by FIS. FIS Global, a financial services software provider that works with 20,000 #banks and corporate treasury clients, is looking at improving the customer experience by offering natural language processing (NLP) solutions, meaning customers can be understood speaking in a natural way. “Whether […] Bank Innovation
#Innovation for the sake of problem-solving (rather than for its own sake) is the way U.S. Bank’s Dominic Venturo approaches his role of chief innovation officer. The bank has a comprehensive outlook on investing and researching emerging #technology trends through its innovation team, Venturo said. The bank approaches its innovation plan by looking for “interesting […] Bank Innovation
My colleagues Elena Mazzotti and Francesca Caminitti recently pointed out that #banks collaborating with #fintechs can move more rapidly and more effectively than they could on their own to introduce new products, streamline processes, enhance the customer experience and accelerate growth. It is a good time for banks to re-examine their #technology strategies and explore the investments and #partnerships necessary to get to the next level of digital sophistication.
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Indeed, Accenture analysis has found that banks’ revenues at risk from #fintech competition are typically in the range of two to three percent from lower loan origination, lower net income and fewer customers acquired. On the flip side, banks can gain a potential three to five percent in revenues by collaborating with fintechs, through enhanced customer acquisition, more fee-based revenues, better pricing accuracy and lower cost of risk.
Three major challenges stand in the way of banks’ collaboration with new technology players:
Ability to create open, collaborative environments with multiple players. While fintechs are often interested in collaborating (especially since it takes successful fintechs from 8 to 14 years to become profitable), their culture is generally very different from that of banks, and there is a need to create a new common culture—compatible with the current bank culture—to have significant market impact.
Avoiding development of a “new legacy” by choosing some fintechs (particularly those providing technology services) that will not scale up to serving multiple players. This pitfall can be avoided by selecting fintechs such as Finastra or Avoloq, which have already been identified by incumbent technology players.
Ability to “scale” the “New”. While proofs of concept (PoCs) have flourished over the last two years, we now see the era of innovation labs and digital factories. These initiatives aim in the right direction but are often sub-scale and lack the ability to attract talent, due to limited investments or lack of urgency to scale.
Finally, we could take the discussion one step further and question the current #focus on “fintechs”. Client journeys are going outside the scope of the purely financial, and relationships could benefit from partnerships between banks and players in other industries such as real estate, health, and education. The focus on fintechs may ultimately prove to be too narrow for banks seeking to enter underserved new markets.
EXCLUSIVE— #Mobile, #data usage, and a simple experience are three of the things Bahman Koohestani, the next chief #technology officer for marketplace lender LendingClub, will be focusing on this year, Koohestani told Bank Innovation. “There’s no question that mobile apps and mobile access continue to be very important,” Koohestani told Bank Innovation. A CTO veteran, […] Bank Innovation
EXCLUSIVE – With over 100,000 signups to date, Ollie Purdue, CEO of digital current accounts #Loot will turn his #focus on #generating revenues this year. “We spent last year and most of 2016 scaling and on the workings of the product,” Purdue told Bank Innovation. “This year, we look at revenues.” Launched back in 2014, […] Bank Innovation
Melbourne-based challenger bank #Judo#Capital will be focusing its efforts on small business #banking in Australia, according to banking plans unveiled by the challenger yesterday. Judo, which is run by former head of National Australia Bank’s business sector Joseph Healy, has also applied for a full banking license with the #Australian Prudential Regulation Authority, Healy […] Bank Innovation
EXCLUSIVE— Alternatives to the traditional #FICO#credit score have become a popular theme for emerging fintechs, but will it actually help consumers #improve their credit? Credit solutions provider #Elevate, however, will #focus on improving its customer’s relationship with their FICO score in 2018 as well as on alternative methods of scoring. “Consumers are more focused […] Bank Innovation
Focusing on #commerce and mobile shopping led to a 56% year-over-year revenue jump for Ant #Financial’s parent company Alibaba, and the company is going to #keep that #focus as it moves forward into the U.S. market. Alibaba’s revenue grew to about $ 7.4 billion, the company reported during its earnings yesterday, mainly due to the tight […] Bank Innovation
#OnDeck is turning towards upgraded features, #expanded#partnerships, and higher-quality #borrowers to jolt its #originations back towards growth. The online small business lender reported $ 464 million in originations for this year’s second quarter, said CEO Noah Breslow during OnDeck’s earnings call this morning. This is down 19% from the $ 590 million OnDeck reported for the […] Bank Innovation
#OnDeck is turning towards upgraded features, #expanded#partnerships, and higher-quality #borrowers to jolt its #originations back towards growth. The online small business lender reported $ 464 million in originations for this year’s second quarter, said CEO Noah Breslow during OnDeck’s earnings call this morning. This is down 19% from the $ 590 million OnDeck reported for the […] Bank Innovation
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